Lemonade Auto Insurance Review: Ratings and Quotes (2023)

Lemonade is a nontraditional online insurance company that recently started offering auto insurance in five states. Lemonade uses a unique process for handling premiums: The company takes a flat fee from customers’ premiums as profit and uses the rest for paying claims and expenses. Then, the company donates the remainder to charities that customers choose.

Lemonade’s auto insurance is a great fit for tech-savvy drivers who want to pay for coverage based on their actual driving. But it has limited availability and no offices or agents for drivers looking for a more personal touch.

What is Lemonade auto insurance?

Founded in 2015 as an online alternative to traditional insurance options, Lemonade is a full-stack digital insurance company committed to offering a transparent experience and quick response times. Lemonade handles the entire insurance process — underwriting, pricing, and selling policies — as well as handling and paying claims.

Lemonade started offering car insurance in 2021, and this product is currently available in Illinois, Ohio, Oregon, Tennessee, and Texas.

In 2021, the company received the highest rank from J.D. Power for overall customer satisfaction for renters insurance. Inc. magazine named Lemonade one of the 250 best-led companies and one of the 429 best workplaces in America.

How does Lemonade auto insurance work?

Like more traditional auto insurance, Lemonade initially calculates your auto insurance premiums based on your driving record, claims history, location, and driving experience. However, when you sign up for a policy, you’ll download the Lemonade app, which uses location-based technology to set your premium based on driving behavior.

Lemonade’s claim to fame is its unique model for handling premiums. Most insurance companies use your premiums to pay for operating costs and to pay out claims — and then keep whatever remains as profit. Instead, Lemonade has a giveback program. The company takes a flat fee from premiums as its profit and uses the rest for paying claims and other expenses. Whatever is left over, the company donates to charitable organizations determined by Lemonade customers.

Lemonade pros and cons

Average cost of Lemonade auto insurance

Insurify uses proprietary data to analyze and compile auto quotes and calculate average car insurance costs to help drivers shop for insurance. Lemonade average car insurance costs aren’t available at this time, but understanding what affects your premiums and how to shop for car insurance may help you decide whether Lemonade is the right insurer for you.

Lemonade car insurance coverage

Lemonade’s auto insurance offers the standard state-minimum required insurance coverage in the five states where it’s available. These minimums vary by state but generally require drivers to carry liability insurance up to a state-mandated amount for property damage and bodily injury.^[1]

In addition to these minimums, you can increase your liability coverage with Lemonade. You can add other common coverages, including:

• 

  Collision coverage

  This pays for repairs or replacement of your vehicle if you’re at fault in an accident.

• 

  Comprehensive coverage

  This coverage pays for damages and repairs for your car after noncollision events like theft, vandalism, and weather damage.

• 

  Uninsured/underinsured motorist coverage

  This protects you in case someone without enough or any insurance hits your car.

• 

  Personal injury protection

  This pays for medical care if you or your passengers sustain injuries in an accident.

Several additional optional coverages are also available:

• Temporary transportation coverage: If you’re unable to drive your car during repairs, this coverage will help you pay for a rental or rideshares.

• Extended glass and windshield coverage: If your windshield or other window is cracked or broken, this coverage will help you replace the glass with a lower or no deductible.

• Roadside assistance: Lemonade includes this coverage for free with your policy. With other insurers, this is often an optional add-on that you must pay for.

How to get a Lemonade car insurance quote

To get a car insurance quote from Lemonade, you have to apply through either the website or mobile app.

1. Navigate to Lemonade’s car insurance product.

2. Click the “Check our prices” button.

3. Provide the requested information, including your name as it appears on your driver’s license and the address where you park your car.

4. Create an account.

5. Receive your quote.

Lemonade car insurance discounts

Many insurance companies offer discounts to help reduce the cost of your auto insurance policy. Lemonade has a number of discounts that can lower your premiums. These include:

• 

  Bundling

  If you get other insurance policies from Lemonade in addition to auto insurance, the company provides you a discount on all of them. Lemonade offers homeowners, renters, pet, and term life insurance.

• 

  EV and hybrid cars

  If you drive an eco-friendly car, Lemonade offers you a discount on your insurance. You’re also eligible for additional perks, like free emergency charging and free coverage for damage to your wall charger.

• 

  Mileage and driving behavior

  Lemonade sets your premium based in part on the number of miles you drive and your behavior behind the wheel. The Lemonade app uses location technology to monitor your driving habits and charges you less if you drive fewer miles and drive safely.

Lemonade insurance bundling options

Bundling your car insurance with other products from the same insurer is a common way of saving money on all your policies. The insurance company is glad to have you insured for multiple policies and passes along some savings to you.

Lemonade offers bundling options for all its various insurance policies, including:

• Homeowners insurance: This coverage applies to damage to your home, stolen or damaged belongings, and liability for a visitor’s injury or property damage.

• Renters insurance: If you rent, you can ensure your belongings are covered for theft or damage with this kind of insurance coverage.

• Pet insurance: Vet bills for your furry friends can add up fast. Lemonade’s pet insurance covers diagnostics, procedures, and medication.

• Term life insurance: Term life insurance will pay your beneficiaries a death benefit if you pass away during the term. Lemonade’s term life policies require no medical exam or wait times.

No matter what your insurance needs are, Lemonade will bundle your policies together. So you can easily bundle your car insurance with any of the above Lemonade policies and save on all of them.

Lemonade insurance reviews and ratings

Industry ratings and customer reviews can help you decide if an insurance company will be the right fit for you. Various rating agencies assign scores to Lemonade that can help you determine if the company has a solid financial foundation and is likely to be there for you when you need it. Customer reviews can give you a sense of what kind of experience you can expect from the company.

Lemonade customer reviews

Lemonade users who review and rate the company seem to fall into one of two camps: the completely satisfied customers who appreciate the smooth processes for making a claim and receiving funds and the very unhappy customers who are frustrated by the lack of human customer service.

Positive reviews typically focus on how easy it is to file a claim, how quickly the claim is approved, and how painless the reimbursement process is.

The negative reviews seem to also zero in on the process of filing a claim. These reviews typically complain about the difficulty of getting an out-of-the-ordinary claim approved and the fact that it can be very difficult to reach a customer service representative to help with the process.

Lemonade ratings

The following rating agencies evaluate the financial stability and overall health of companies like Lemonade. These ratings can help you feel confident that your insurance company will be able to pay out any claims you file in a timely fashion. However, newer companies like Lemonade may not yet have ratings from all these agencies.

• A.M. Best: Not rated

• J.D. Power: Not rated

• Better Business Bureau: Not rated or BBB accredited

• Standard & Poor’s (S&P): Not rated

• Moody’s: Not rated

• NAIC Complaint Index: 3.51 (More complaints than expected)

Lemonade vs. other insurers

You have no lack of options for auto insurance. Comparing how Lemonade stacks up against other online insurers can help you make the right coverage decision for your needs.

Lemonade vs. Mile Auto

Mile Auto is a pay-per-mile car insurance company that doesn’t require you to use telematics to determine your mileage. Instead, this insurer simply asks you to snap a picture of your odometer each month and charges your premium based on your mileage plus your base rate.

Mile Auto is best for drivers who put fewer than 10,000 miles per year on their cars. Such drivers may be able to save up to 40% off their current rates, according to Mile Auto’s website.

While Lemonade does provide low-mileage drivers with discounts, it does so with the required use of driver tracking (through the app), and it may not save drivers as much money as a strict pay-per-mile policy like Mile Auto’s.

Lemonade vs. Metromile

Lemonade recently acquired Metromile, but it’s still possible to purchase a Metromile policy that’s not part of the Lemonade brand.

Like Lemonade, Metromile uses telematics to track your mileage and driving behavior. But Metromile offers a straight pay-per-mile premium cost (on top of your base rate), much like Mile Auto’s strategy. Also, Metromile is available in different states than Lemonade is. Metromile’s per-mile insurance is currently available to drivers in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

Lemonade vs. Elephant

Elephant is an online insurance company that serves eight states: Georgia, Illinois, Indiana, Maryland, Ohio, Tennessee, Texas, and Virginia. Unlike Lemonade and the other insurers on this list, Elephant doesn’t yet use telematics or other tools to determine your mileage or driving habits and potential premium discounts.

Instead, Elephant offers various discounts that drivers can qualify for to help them reduce their premium costs. These discounts include:

• Multi-car

• Bundling

• Claims-free

• Early bird discount (if you sign up for a policy before your current coverage expires)

• Student

• Work from home

• Homeowner

• Pay in full

• Paperless

• E-signature

• Online quote

How to file an auto insurance claim with Lemonade

An auto insurance claim is the process of notifying your insurer that you suffered losses and need reimbursement under your policy.^[2] Lemonade tries to make the claims process as easy as possible. To make a claim, you need to first navigate to the Lemonade app, then follow these steps:

1. Click the bright pink link to “File a Claim” on the app.

2. Lemonade’s AI will begin asking you questions.

3. Record a short video (of about a minute) explaining what happened.

4. The app will prompt you to explain what damage your car has sustained, using an interactive graphic to identify the areas affected on your car.

5. Take pictures of the damage.

6. Share any details of other cars involved in the claim.

7. Scan the police report, if there is one.

8. Submit your claim on the app.

Lemonade insurance FAQs